RALEIGH, N.C. (NCN News) – The idea of suspending the North Carolina’s gas tax is meeting with mixed reviews. This as a special session of the General Assembly is set for Wednesday to address spiraling fuel prices in the wake of the closure of the Strait of Hormuz and the war against Iran.
Democratic Governor Josh Stein says he agrees with the idea of suspending the state’s gas tax — and questioned why it wasn’t addressed soon. His remarks came during the regular meeting of the Council of State, which includes all of the statewide elected officials.
Republican Agriculture commissioner Steve Troxler says he also agrees with the idea.
Business groups and conservative researchers are also lining up in favor of the idea.
NFIB State Director Gregg Thompson says small business owners are urging their legislators to temporarily suspend the state tax on gasoline and diesel fuel when the General Assembly returns to Raleigh on Wednesday for a special session focused on relief from high fuel costs.
“Gasoline and diesel prices affect the cost of everything, from raw materials to shipping to the paper used to print sales receipts,” Thompson said. “Those costs ripple through the economy. Small business owners face higher expenses, while their customers have less money to spend at local shops and restaurants or to travel.”
Legislative leaders have called a one-day special session to consider tax relief on gasoline and diesel fuel. Thompson said a temporary suspension of the state fuel tax would be a practical step toward easing costs for small businesses and the customers who support them.
“Small businesses often operate on thin margins, and they can’t always absorb higher costs or pass them along without losing customers,” Thompson said. “We urge lawmakers to use this special session to provide meaningful relief for North Carolina’s small businesses and families.”
The idea also comes with questions about how the money the state doesn’t receive will be made up to pay for transportation projects.
“Any temporary suspension of the motor-fuels tax should be structured to protect transportation funding. North Carolina has long relied heavily on user fees to fund its roads, and the gas tax remains a substantial part of that system,” said , Donald Bryson, CEO of the John Locke Foundation.
“This moment should also prompt a longer-term conversation about modernizing transportation funding. Moving from the gas tax toward a mileage-based user fee would preserve the user-pays principle, ensure that drivers contribute regardless of how their vehicles are powered, and provide a more durable alternative to taxing fuel at the pump.”
Others say a temporary suspension of the gas tax is a partisan move that does not address the root of the problem.
“We see the call for a one-day special session for what it is: a political gimmick, not a genuine commitment to making life more affordable for North Carolinians,” said Alexandra Siorta Executive Director of the NC Budget and Tax Center.
“Legislative leaders have had years to prevent costs from being shifted onto families and local communities and protect North Carolinians from the harmful policy choices of federal leaders. Instead, legislative leaders have doubled down on an agenda that gives tax breaks to the wealthiest corporations and richest people while ignoring the legitimate concerns about rising costs and diminished public services.
“They have pushed more costs onto local governments without any meaningful commitment to address the root causes of household budgets being squeezed, including the rising costs of food, child care, transportation, health care, and housing.
“To be clear, a gas tax holiday or another temporary measure aimed at gas prices is another empty promise, much like the tax amendments on the ballot in November. It won’t deliver lasting relief to working families struggling at the gas pump or make them any less vulnerable to the next spike in gas prices.”
’What it won’t do is begin the harder, more important work of making our economy work for the people of this state rather than powerful interests. Policies that invest in our public transportation and electric vehicle infrastructure, for example, could reduce families’ exposure to volatile gas prices over the long term.”
Democratic Senate leader Sydney Batch wrote in a press release, ”North Carolina families have been getting screwed over by rising prices for months thanks to failed Republican leadership. Yet, somehow, Phil Berger and Destin Hall just now noticed? Exactly one month before Election Day?”
According to AAA, the average price of regular gasoline in North Carolina was about $4.09 per gallon Tuesday morning, up from $3.84 a month ago and $2.83 a year ago. North Carolina’s motor fuels tax is 41 cents per gallon.
There have also been efforts, both on the state and federal to allow wider use of “red dyed diesel,” which is colored red for off road use and is exempt from fuel taxes, such as agriculture.